The Price of a Good Night's Sleep

"Dial a number" and "tape a program" are phrases that have been relegated to the dustbin of history (what's a dustbin?). "Paper trail," sadly, is also on the verge of losing its meaning due to the tidal shift toward electronic record-keeping.

As an auditor who cut his teeth in the days before electronic documents, your humble observer was always taught that, no matter how fancy the reports, compilations, and analyses, the basic data for important work (e.g., financial statements, tax returns, property listings) should always be traceable to a signed piece of paper. Sure, the electronic revolution has made life easier, faster, and cheaper, but sometimes the price is too high. I'm not a believer in electronic voting, for example, because of the risk of fraud.

Now it turns out that the move toward e-filing tax returns has resulted in an explosion in tax-return fraud:

Tax fraud, amazingly, is now the third-largest theft of federal funds after Medicare/Medicaid and unemployment-insurance fraud.

Tax-identity theft exploded to more than 1.1 million cases in 2011 from 51,700 in 2008. The Treasury Inspector General for Tax Administration last summer reported discovering an additional 1.5 million potentially fraudulent 2011 tax refunds totaling in excess of $5.2 billion.

The IRS markets e-filing as being not only green but beneficial to the taxpayer due to faster processing of refunds. Of course, most of the benefit really inures to the government, which doesn't have to re-input data into its computers and can flag returns much more quickly for audit.

Your humble observer prepares and files each family member's tax returns the old-fashion way. As a licensed tax-preparer, he also does the same for his clients, the number of which he is careful not to expand beyond ten (10) to trigger the IRS' e-filing requirement. Yes, he produces a lot of paper and foregoes some business, but that's the price of a good night's sleep.